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Nokia, Siemens Announce Operational Merger

Finland-based cell phone manufacturer Nokia and Germany-based telecommunications company Siemens AG announced this week a new merger of their companies in a deal worth $31.6 billion. According to news reports about the deal, Nokia would have a majority of seats on the new board for the company that would emerge as a result, and the new company would be based in Finland. A Nokia executive, Simon Beresford-Wylie, has been put forward as the most likely head of the Nokia-Siemens conglomeration, assuming all goes relatively to plan.

Though it appears that Siemens is getting the short end of the stick in this deal, what with a reduced role, pooling the resources and operations of Nokia and Siemens is expected to allow both Siemens and Nokia to reduce unneeded research and development spending, thus saving as high as $1.58 billion annually. And even though Siemens seems to be disappearing as a result of this deal, the company has no plans to leave the telecommunications business.

Both Siemens and Nokia would share an equal, joint ownership of their combined company. Nokia is one of the most successful companies in Europe, a staple of Finland that not everyone knows is based in Scandinavia. Nokia phones are probably the most popular cell phones on the planet, known for quality and innovation and getting products out quickly. For its part, in 1997 Siemens introduced the first GSM, or ?Global System for Mobile Communications?, cellular phone ? in other words, the first true digital cell phone technology.